LNG geopolitics: Sanctions are changing gas flows as reduced Russian supply fuels new volatility; US emerges as dominant but risky supplier – The Times of India

A new analysis from the Oxford Institute for Energy Studies has warned that global efforts to shift away from Russian gas are creating new market instability, largely due to tighter supplies and shifting political relations. The report says that reduced dependence on Moscow has pushed several countries to rely more heavily on the United States, describing the shift as greater dependence on “an increasingly volatile ally in the US.”According to news agency ANI, sanctions on Russian energy have pushed global demand towards American LNG, putting the US in a position to dominate LNG supply growth. The country’s export capacity is expected to nearly double by 2030, at a time when the global gas market is already facing turmoil.The study warns that while a new wave of LNG supplies later this decade could ease pressure, price volatility is likely to worsen in the short term. Gas is increasingly used as a backup for renewable energy, and delays in new investments can cause shortages. Such pressure, the report notes, could fuel political friction, especially if major manufacturers accuse the EU of increasing regulatory and price uncertainties.The institute also highlighted concerns about Washington’s push to expand markets for U.S. LNG – a trend that was particularly strong under the Trump administration – saying this could politicize gas trading and undermine buyer confidence in the long term.The long-term prospects for natural gas are already uncertain, with renewables challenging in Europe and China, and coal remaining competitive in India and parts of Asia.Another risk mentioned in the report is the United States’ influence over global energy flows through the dollar clearing system, which could allow the country to impose unilateral or secondary sanctions. This power, the study says, increases the likelihood of disruptions and encourages countries such as Russia, China, India and Iran to explore local currency trading.Globalized gas markets have further increased these vulnerabilities. According to ANI, interconnected benchmarks now mean that a supply shock in one region can immediately raise prices elsewhere. After the conflict in Ukraine, European and Asian gas prices effectively converged, turning Europe’s energy crisis into that of Asia.The volatility has raised concerns among major Asian buyers, including China and India, about whether LNG can be used for power generation and industrial use in the long term.India announced on Monday that it has signed a major one-year deal to source 2.2 million tonnes of LPG from the United States – about 10 percent of annual imports – as part of its broader strategy to diversify fuel supplies. The deal comes amid strained ties between India and the US following President Donald Trump’s decision to increase tariffs on India to 50 percent.